Global investors have a lot to pay attention to these days. While just a few months ago the investment discussion for many was one of worry, aggressive shifts by central banks to avoid an economic downturn coupled with no severe escalation in US-China trade tensions sent equities to new, all-time highs. That might leave you wondering what to do next. In the August 2019 issue of Investing in emerging markets, our strategists in the UBS Chief Investment Office (CIO) recommend that investors:
- Focus on Liquidity, Longevity and Legacy when putting money to work
- Avoid keeping lump sums on the sidelines
- Pursue the right opportunities in emerging markets today
Take the time to build the right emerging market strategy for your investment goals.
Investing at all-time market highs
While your gut may tell you that investing at an all-time high for the market is a mistake, market history says that isn't the case. Analyzing the last 75 years of market returns, the best results don't come from sitting on the sidelines. While investors should temper expectations, high equity valuations don't mean you shouldn't invest.
Investing lump sums vs. dollar cost averaging
If you have a large cash pile, you may be debating putting it all to work at once. Financial analysis shows that most investors are better off putting that entire lump sum to work rather than doling it out over a longer period of time. Recent UBS publications offer methods to put larger lump sum investments into the market quickly for the best long-term results.
Tracking monetary policy shifts
Central bankers have shown they are willing to cut rates, pushing down yields of safer assets. This puts worries of recession on the back burner and brings up new questions of where to invest for the best returns. Higher yielding currencies, bonds and equities might be the right choice.